Leavenworth residents weigh pros and cons of tourism-dependent economy

LEAVENWORTH – The community shared the pros and cons of tourism and identified sustainable versus unsustainable practices during the second session of the city’s community visioning series on Sept. 16, focusing on “sustainable tourism.”

“The decision to save the Miracle Town of Leavenworth through Project L.I.F.E. and the Bavarian theme has resulted in the Leavenworth that we have today: a highly attractive destination that welcomes an estimated three million visitors every year. Whether we like it or not, the City of Leavenworth, the city budget, is dependent on this tourism economy,” said City Administrator Matthew Selby.

The city operates with three different funds: the general fund, the street fund, and the enterprise fund. The enterprise fund, which includes water, sewer, parking, stormwater, and garbage enterprise funds, operates on user fees, and each fee is designated to its particular fund. For instance, water rates pay for water treatment plant and distribution, and the parking fees pay for the Glacier Lot improvements, said Selby.

Aside from the enterprise fund, the city operates through tax revenue such as property tax, utility tax, sales tax, and lodging tax. Property tax revenue funds about 13 percent of the city’s annual operating budget. This year, the city anticipates almost $727,000 in property tax revenue. The city also brings in about $750,000 in utility tax revenue.

“The bulk of the revenue that comes to the city is from sales tax, and that’s why I say that we are so dependent on this city’s tourism economy,” said Selby.

The city receives 1.15 percent of the 8.6 percent sales tax rate. For every $100 spent within city limits, the city receives $1.15, which is split between public safety (ten cents), the general fund (47 cents), and public streets (58 cents). In 2023, the city received $2.75 million in sales tax revenue. 

Yet, the city’s largest source of revenue is the hotel-motel tax, or lodging tax, which is a 5 percent tax rate. The lodging tax is expected to generate about $4.5 million in revenue this year, said Selby. However, according to RCW 67.28.1816, the use of lodging tax dollars is restricted to tourism related expenses, such as the Festhalle, Bigbelly trash bins, and the Front Street restroom expansion project. 

The city is also able to apply lodging tax dollars to 25 percent of the Howard Hopkins Memorial Pool’s budget, because a pre-pandemic survey identified about 25 percent of the pool users were from 50 miles outside of the city.

To open group discussion during the meeting, attendees were asked, “Why are you here? What drew you here? Why did you stay?” The most common answers were access to the outdoors, family, a sense of community, and a small town feel with access to basic services, arts and entertainment and business opportunities.

Next, residents were asked to consider the pros and cons of living in a town that strongly relies on tourism. Wide access to arts and entertainment, better parks, a pool, and hospital, successful nonprofits, walkability, variety of dining and shops, a secure tax base, business opportunities were some of the pros listed. 

For cons, common answers were parking, overcrowding, lack of affordable housing, traffic, high prices in shops and restaurants, stress on public works and natural resources, fire safety, and noise, light and litter pollution.

Lastly, attendees were tasked to answer, “What does a sustainable tourism model mean to you? What would an unsustainable model look like? How do we create a model that sustains a healthy community?”

Residents said they wanted to see slower growth with more balance between economic drivers while supporting the community. Common suggestions were limits on vacation rentals and vacant properties, enforcement on trail and river quotas and stewardship, expanded public transportation services, a parking garage, bike paths, increased promotion of composting and recycling usage, and limits on light and noise pollution.

During the discussion, Troy Campbell, Executive Director of the Leavenworth Chamber of Commerce, brought up the Chamber’s sustainable management plan as an example, which includes funding it forward, or ensuring a fundraising mechanism during events for nonprofits, visitor flow management, destination development, climate resiliency, and communications and monitoring.

“For instance, in the Seattle area, we don’t really deliver, ‘Come visit Leavenworth’ anymore, we deliver ‘Give a Schnitzel!’ messaging, which [means] if you come here, be a better steward of our trails and our river,” said Campbell.

The Sept. 16 session was part of a four-part Community Visioning series intended to help shape the direction of Leavenworth over the next five to 20 years. Three of the sessions examine housing a community, sustainable tourism, and accountable stewardship. Community members can also complete a survey: surveymonkey.com/r/LeavenworthVisioning

The final session will consolidate the collective input of the three sessions to define the city’s path forward on Oct. 14 from 6 p.m. to 9 p.m. at Fire Station 31, 228 Chumstick Highway.

Taylor Caldwell: 509-433-7276 or taylor@ward.media